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Christopher Lewis
S&P 500

The S&P 500 has gapped lower to kick off the trading session on Wednesday, testing the 50 day EMA. Ultimately, the market has shown itself to be supported at the 50 day EMA more than once, so having said this is likely that we continue to see a massive amount of volatility, but given enough time I also think that the S&P 500 will need to make a more substantial choice. Unfortunately, what we are moving on now is essentially the hope of some type of stimulus to bail the economy out. Obviously, the traders on Wall Street loves the idea of cheap money, so that is what will push things to the upside.

S&P 500 Video 08.10.20

To the downside if we were to break down below the 50 day EMA, then it could open up a move down towards the 3300 level, possibly down to the 3200 level. On the other hand, if we get a daily close above the 3420 handle, then it is likely that we could continue to go much higher. That of course will probably have a lot to do with some type of stimulus, but until then I think that we are looking at a lot of back and forth.

The 50 day EMA and the 3420 area, or so, it is basically the range that you are trading in on a short-term chart. All things being equal, you will need to see some type of daily close in one direction or another before putting any serious amount of money to work.

For a look at all of today’s economic events, check out our economic calendar.

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